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UKRAINE

Switzerland stops new banking business with Russians on EU sanctions list

Russian individuals and entities on a European Union blacklist will not be able to use Swiss banks to circumvent European sanctions against Russia over its invasion of Ukraine, Switzerland's Financial Supervisory Authority (Finma) said on Friday.

UBS bank branch sign in Lausanne
A branch of Swiss banking giant UBS in Lausanne. Fabrice COFFRINI / AFP

As of 6pm on Friday evening, financial intermediaries in Switzerland were prohibited from entering into new business relationships with the individuals and companies on the sanctions list, and must immediately report existing business relationships, Finma said in a statement.

“Further steps to strengthen these measures are currently being prepared,” Finma said.

Earlier, the Swiss government added to its watchlist 363 new Russian individuals and four companies that the EU had put on its sanctions list.

In 2020, Russian citizens had just under 10.5 billion Swiss francs in Swiss banks, according to Finews

Usually neutral
Switzerland is outside both the EU and Nato and has a long history of neutrality.

But while some have criticised Switzerland for not imposing its own sanctions and hiding behind this neutrality, there are other reasons, according to Livia Lieu, an official at the Federal Department of Foreign Affairs (FDFA).

She said that Switzerland exercises the role of “protective power “in certain international conflicts – for example, it represents Russian interests in Georgia, and vice versa.

Switzerland’s delicate role as intermediary would therefore be in peril if the country were to act against Russia.

“Our position, and above all my goal, is to leave the doors open so that we can do what most other countries can no longer do – keep the channels open between countries that no longer have diplomatic relations. Switzerland can provide this added value,” Swiss President and Foreign Minister Ignazio Cassis said at a news conference in Bern on Friday.

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POLITICS

Ukraine and allies lay foundations for reconstruction at Swiss conference

Allies of Ukraine meeting in Switzerland were due Tuesday to adopt a declaration spelling out the principles and priorities of rebuilding the war-shattered country, estimated to cost at least $750 billion.

Ukraine and allies lay foundations for reconstruction at Swiss conference

Leaders from dozens of countries, international organisations and businesses have been meeting in the southern Swiss city of Lugano under tight security since Monday, discussing the best path forward for reconstruction, even as Russia’s war continues to rage in Ukraine.

‘A beautiful country’: How Ukrainian refugees see Switzerland

Speaking on the first day of the Ukraine Recovery Conference, Ukrainian President Volodymyr Zelensky and a long line of government ministers described the massive destruction caused by Russia’s February 24 invasion.

“Reconstruction of Ukraine is not a local task of a single nation,” Zelensky said via video message. “It is a common task of the whole democratic world,” he said.

Prime Minister Denys Shmyhal said the recovery “is already estimated at $750 billion”. “The key source of recovery should be the confiscated assets of Russia and Russian oligarchs,” he said.

“The Russian authorities unleashed this bloody war. They caused this massive destruction, and they should be held accountable for it”.

READ MORE: Switzerland extends sanctions against Russia over Ukraine invasion

The conference, which had been planned before the invasion, had originally been slated to discuss reforms in Ukraine before being repurposed to focus on recovery.

Shmyhal laid out the government’s phased reconstruction plan, focused first on the immediate needs of those affected by the war, followed by the financing of thousands of longer-term reconstruction projects aimed at making Ukraine European, green and digital.

Those priorities are expected to be reflected in a final Lugano Declaration setting out the general principles defining a framework for rebuilding Ukraine, which should be adopted when the conference wraps up around midday Tuesday.

As billions of dollars in aid flow into Ukraine, lingering concerns about widespread corruption in the country mean far-reaching reforms will also be seen as a condition for any recovery plan decided.

The former Soviet state has long been ranked among the world’s most corrupt countries by Transparency International.

In Europe, only Russia and Azerbaijan ranked worse.

The Ukrainians have proposed that allied countries “adopt” specific regions of Ukraine, and lead the recovery there to render it more efficient. Britain has proposed taking on the Kyiv region, while a diplomatic source said France would concentrate on the heavily-hit Chernihiv region.

Total Resistance: The Swiss Cold War manual inspiring Ukraine’s fight against Russia

In all, around 1,000 people are attending the conference, including European Commission President Ursula von der Leyen, who let out an enthusiastic “Slava Ukraini” (glory to Ukraine) after insisting on the importance of rebuilding a Ukraine better than before the war.

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